Saturday, June 25, 2016

Can a gun trust be transferred?

We witnessed today a rather lengthy debate in a Facebook group related to NFA weapons regarding whether a gun trust could be set up with by a NFA dealer and already have NFA weapons transferred to that trust by means of a Form 4, then when a potential buyer for those weapons comes along, the dealer would simply put the buyer's name in the trust as a grantor and deliver the weapon/s to the buyer immediately, instead of having to wait 3-4 months.

Unfortunately, this is not the first time we've heard debates like this or have seen someone try to sell their gun trust. It probably stems from a basic misunderstanding of what a trust is.

While a trust is considered an entity under the NFA, like corporations or LLCs, they are not a statutory entity that can be transferred or sold. A trust is a contract between the grantor (person creating the trust) and the trustee (the person managing the trust). The grantor will always be the grantor and there is no procedure or opportunity to change the grantor in a trust agreement. The grantor always retains the right, under the terms of the contract, to change and amend a revocable living trust, so just changing the trustee to a new person isn't a workable solution, either (I'm never going to have my weapons in a trust that someone else can change on me!). And what's worse, if your weapons are in a trust created by someone else and that person dies, the trust has no become irrevocable and if you're not a remainder beneficiary of the trust, you've got big problems!

While this might seem to be a nice, easy way to avoid the wait times involved with NFA weapons, you can guarantee that if the ATF ever got wind of this happening, they would make every effort to find a criminal charge that would fit. Don't take chances, as felony charges and large fines (not to mention the cost of your attorney) are not worth a couple of months!